The Senate Homeland Security and Governmental Affairs Committee froze the number of non-emergency employees at the Homeland Security Department for the forseeable future. And lawmakers may go one step further and halt the growth of contractors.

Sen. Rand Paul (R-Ky.) sponsored an amendment to limit the number of employees at DHS at the present level until the nation’s unemployment level drops to 8 percent.

The committee approved the provision Wednesday as part of the first-ever DHS reauthorization bill. The committee approved the manager’s amendment, which included 31 separate changes from the original bill, by a vote of 9-1.

Sen. Joseph Lieberman (I-Conn.), chairman of committee, said he may take it one step further and freeze the number of contract employees when the bill gets to the Senate floor in the coming months.

“We will stay on top of it,” Lieberman said after the markup. “They are trying to rebalance the workforce, but when we held a hearing on this a while ago, I was shocked by the number of contract employees they had. Contract employees are almost as many as full time federal employees and that is a real problem.”

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Rebalancing the DHS workforce

Over the past two years, DHS has focused on rebalancing its workforce. In the chief information officer’s office, for instance, the ratio at one point was 7-to-1, favoring contractors to federal employees. But the ratio has been reduced to 4-to-1.

DHS is trying to do the same in other areas as well.

“Our goal to have a balanced workforce is not just to reduce contractors, but find the right balance between the two,” said DHS undersecretary for management Rafael Borras in a recent interview with Federal News Radio. “We want to make sure we are using the contracting community smartly and wisely. It’s not a numerical quota we are trying to achieve.”

The Government Accountability Office first reported in 2007 that DHS relied too much on contractors, especially those doing work usually reserved for federal employees.

Sen. Claire McCaskill (D-Mo.) voted against the Paul amendment to freeze the non-emergency workforce. She said reducing contractors is where more savings could come from.

“What we may actually be doing by supporting this amendment is saying, hire more contractors and get rid of FTEs, which we now know are more expansive,” she said. “And frankly, a lot of these contracts are fixed-price and we don’t even know what the contractors are making, sitting at DHS working.”

McCaskill said DHS doesn’t even know how many contractors there are working for them. Some estimate at one time there was as many as 200,000.

Hard to count

Paul said he was willing to add the contractors provision. But McCaskill said without a baseline, restricting the overall number wouldn’t work.

“I think we would get more bang for the buck if we get out of notion that by hiring contractors we are making government more efficient and effective and contractors are less expensive, when in reality they are not,” she said.

“In 33 of the 35 job classifications POGO looked at, the average contractor billing rate was significantly steeper than the average compensation for federal employees. The two jobs where it was more cost-effective to hire contractors were groundskeeper and medical records technician,” the report found.

McCaskill said POGO’s report highlights the need to look at this issue more closely.

The committee has been concerned for some time about the number of DHS contractors. Lieberman and Sen. Susan Collins (R-Maine), the committee’s ranking member, wrote to DHS Secretary Janet Napolitano in February 2010 about the agency’s overreliance on contractors.

In the meantime, if the DHS authorization bill becomes law — and it’s a big if — DHS’s non-emergency workforce would be frozen.

“The revised version has an overall cap, which is a way better approach because then you can manage and make decisions on which positions should be filled and which should not,” Collins said.

Along with the Paul amendment, the committee also approved several other changes to the original bill.

New restrictions on cost-plus contracting

Sen. John McCain (R-Ariz.) and Collins worked out a deal to require DHS to get approval before using cost-plus type contracting, such as time-and-materials and labor hours.

DHS would have to seek committee approval three days before awarding any task order worth more than $10 million on a cost-plus basis.

For those contracts under $10 million, the DHS undersecretary of management and its investment review board must approve cost-plus contracts.

This amendment caused concern among industry groups.

“TechAmerica greatly thanks the committee for their efforts to thoughtfully narrow the focus of proposed restrictions on the use of cost-type contracts at the Department of Homeland Security, but we remain concerned about the reaction of the acquisition workforce and the possibility that they will be averse to using anything other than fixed price to avoid unwanted scrutiny,” said Trey Hodgkins, the association’s senior vice president for national security and procurement policy. “It remains our position that the acquisition workforce should be afforded the flexibility to determine what contract type promotes the best value for the taxpayer and the department and this diminishes that flexibility.”

Another provision from Sens. Daniel Akaka (D-Hawaii) and Tom Coburn (R-Okla.) would require DHS to make public all reports it sends to Congress as part of the Government Performance and Results Modernization Act.

Coburn also wants several GAO reports on the cost of travel expenses by DHS political appointees, the quality and effectiveness of the agency’s intelligence analysis capabilities and one on the office of policy to see if it has grown too much over the last few years.

Another Coburn amendment would require Congress receive a cost estimate on what it will cost to consolidate DHS headquarters to the St. Elizabeth’s complex.

The manager’s amendment also includes a provision from Sen. Tom Carper (D-Del.) to require the Customs and Border Protection and Immigration and Customs Enforcement to develop workforce staffing plans to ensure they have the right levels to promote integrity of the workforce and to investigate any allegations of misconduct.

Lieberman said he wasn’t sure if the full Senate would take up the bill before the end of the year, but is hopeful to get it passed early in 2012.

The House Homeland Security Committee is working on its own version of a DHS authorization bill, said Rep. Peter King (R-N.Y.), chairman of the committee.

He said last week he hoped to have a markup of the bill in the coming weeks.